18th October 2007 : Leadcom voted "AIM International Company of the Year for 2007"




Main Web Site : http://www.leadcom-is.com/

Investor Relations Email : investorsinfo@leadcom-is.com

The move upwards and large buying of recent days could be linked to the award of a big CDMA contract to ZTE in India in the past few days.

Leadcom work with ZTE, and ZTE has no local Indian manufacturing ability, so could be using Leadcom's Indian operations.

560 Crore Rp = 120.5 million US$

It might be linked to the sudden large buying of Leadcom shares, and if its this, then its the first of the many potential Indian contracts, and the start of the upgrades to the forecasts. Might be news coming Monday in the results statement ??? Anway, the coming 6 months is going to see lots of contracts awarded in India, and lets hope Leadcom get subcontracted on at least a few of them :)




http://economictimes.indiatimes.com/articleshow/1869081.cms


Chinas ZTE bags BSNLs Rs 560-cr order
MANOJ GAIROLA

TIMES NEWS NETWORK[ TUESDAY, AUGUST 08, 2006 01:33:38 AM]

NEW DELHI: Chinese major ZTE has won a Rs 560-crore order from the government-owned Bharat Sanchar Nigam (BSNL) for providing equipment and establishing a network of 25 lakh fixed wireless phones (FWP) using CDMA technology. The hardware will be used in providing telephone connections in villages. The company aims to provide telephone connections in most of the villages in the country by the end of FY07.

As per our plans, we will start deploying CDMA systems very soon and the phones will be available from December. By the end of this financial year, whole of network will be deployed, said RL Dube, director (planning) of BSNL. The company is using wireless technology for providing telephone connections in villages as it is cost effective and easy to install.

The department of telecommunications (DoT) has already said that the rural telephone connections on wireless technologies will be eligible for subsidy from the universal obligation fund (USO). Earlier, the USO could be utilised only for the wireline telephone connections.

We will cover almost all the villages, except some hilly terrains, by March, said Mr Dube.The tender for CDMA-based FWP phones was invited when Huawei failed to deliver equipment in an earlier tender for 10.5 lakh telephone connections. Huawei was the lowest bidder in the tender for installing a network of 10.5 lakh CDMA lines. It participated in the tender with two Indian companies HFCL and the government-owned SCL.

The company was issued a show cause notice by BSNL. At one stage, BSNL was even contemplating banning Huawei from participating in any BSNL tender for a year. However, later the BSNL board gave clean chit to it and didnt take any action against it.

In the earlier tender, Huawei had quoted a price of Rs 150 crore for supplying 10.5 lakh lines. The new price is about 40% higher than what Huawei had quoted in earlier tender. The government has not yet given permission to the Chinese equipment companies to set up manufacturing units in India. Therefore, ZTE will have to import equipment in the country.

The time for the award of the BSNL big big contract draws nearer, and 21,400 Crore is approx 4.6 billion dollars. Also some new news of an MTNL expansion plan of circa 2408 Crore (approx 518 million US$)
All these big expansion plans make the recently awarded 120 million CDMA WP contract for ZTE from BSNL look very small. As has been said, India in the coming 5 years is going to be expanding at a mouth watering rate for companies like Leadcom :)


http://tinyurl.com/jyyfv


BSNL to expand mobile network by 63.5 million lines

New Delhi | August 10, 2006 5:06:44 PM IST

Bharat Sanchar Nigam Limited (BSNL) Board has approved the expansion of its mobile network by 63.5 million lines at an estimated cost of around Rs. 21,400 crore.

Informing the Rajya Sabha, the Minister of State for Communications and Information Technology, Dr. Shakeel Ahmad said that a tender for procurement of 45.5 million lines network has already been floated by BSNL.

The Minister further said that a proposal is under consideration to extend subsidy support for creation of infrastructure to provide mobile services in rural and remote areas, where there is no existing wireless coverage.

"BSNL has proposed to provide mobile coverage to villages having population greater than 200 progressively subject to techno-commercial feasibility," Dr. Ahmad said.

The capacity proposed is also targeted to create at least 50 percent of 250 million network set as an objective by the Government, he added.

Dr. Ahmad informed the House that as against the target of 250 million connections set by the Government, which is planned to be provided up to the end of December 2007, 153.18 million connections have already been provided as on June 30 2006.

Replying to a question asked by Shobhana Bhartia, Dr. Ahmad said that MTNL also plans to invest Rs. 2408 crore for providing 6.4 million lines during the Eleventh Five Year Plan (2007-12). (ANI)

You night be right on all counts PP but there is the rather unfortunate Israeli connection which could be a problem in gaining contracts.

coeliac1, no problem with gaining contracts, business is business, its only the cranked up media who like to push out the scare stories, nobody in the real business world cares.

Looks like the ceasefire comes into effect as well now, that should be a boost for the SP as well (as some will say it removes the risk of total middle east war, not that it was going to ever happen anyway).

Solid results today, great outlook.

Webcast at 6pm today to listen to, link is via the Leadcom website.

Good summary of the webcast from a post on AFN :

Masurenguy - 14 Aug'06 - 18:37 - 1839 of 1840

From this evenings webcast (14/8/06):

1. Leadcom expect that the Indian Capability Trial will be completed within 5 weeks but they anticipate that they may be in a position to make an announcement earlier than that.

2. Leadcom has been invited by one of their partners in the US to participate in a major rollout project which could commence during the first quater of 2007. They did not indicate any potential value in relation to this but the implication was that this would not be insignificant.

3. The existing pipeline was confirmed as being north of $300m as at July 06.

4. Leadcom state that the existing quantifiable opportunity in India is currently $66m and that the potential opportunity could be in hundreds of millions of dollars.

The forecast figures quoted do not take any India potential into account, as before, any India contract wins coming means immediate upgrades to earnings forecasts :)


Extract from http://www.armshare.com commentary :

.........In July, a Caribbean operator signed a letter of intent to purchase a turnkey solution, including civil works, installations, commissioning and integration - the value of the agreement is c.$15 million over the next 18 months, a third of which is expected to be recognised in 2006.

..............................The interim results to June 2006 showed sales of $61.8 million (2005: $46.8 million), pre-tax profit of $5.7 million (2005: $4.3 million) and EPS of 4.0c (2005: 5.0c) - the tax rate was 30% (2005: 7.1%). The company reported that the gross margin was 28.5% (2005: 27.6%); the board expects 2006 to show 40% growth over 2005.

Research Standing

We said "Analyis is more easily practiced on operators nearer home." Despite this Little Englander stance, this company's performance commands attention.

The company broker's note dated 14th August projects EPS of 4.4p for 2006 (based on 30% tax charge vs 17% for 2005) and 6.4p for 2007 representing P/Es of 12.95 and 8.9 respectively based on the share price of 57.0p at 14th August...................

PP

The increase in profits is being eaten up by the option costs and tax. Net post tax profits were actually down. The balance of the profits as between management and shareholders seems skewed overly towards the former- eg over 30% of profit over $13m, before option costs, goes into their back pockets. Add the options and standard pay and the management are doing nicely, thank you. I am feeling cynical about value of Lead to shareholders.

coeliac, the tax increase to full 30% certainly did effect the post tax profits, but that is expected, LEAD is now at the 30% rate and it does not go up anymore. I would expect a week or so of weakness as T's are taken out, but then the news flow will be strong I am led to believe Sept through to year end, so am hopeful that the real value of what they have been doing at Leadcom will come shining through. They are set up for impressive growth, and can now, we hope, deliver on that.

Some big big trades today, and also a tick up in the afternoon. No idea whats going on, but perhaps (fingers and toes crossed) the overhang is reduced or clear now...........

The price has been non-responsive to buying recently, always drifting back, which points to slack in the free float, and here's hoping we just got some of it clear.

Personally with news in the web cast that some India news is due in September, you would expect some large positions to be taken up ahead of this.

The webcast stated an update on the capabilities trial in less than 5 weeks, lets hope they have a contract waiting to be signed on completion to start the India ball rolling. Looks like the JV in India is 99% owned by Leadcom, so no reduction, in LEAD terms, of profits it generates. Based on that 5 week comment we should be news w/c 11th Sept, if not before.



http://uk.biz.yahoo.com/14082006/214/leadcom-enjoys-strong-first-half.html


Monday August 14, 11:20 AM

Leadcom enjoys strong first half

LONDON (ShareCast) - Telecom services provider Leadcom continued higher today after it reported a strong performance at the interim stage and said the outlook for the second half of 2006 is positive.

Net profit for the six months to 30 June was (Advertisement)

1% better than a year ago at $4.05m on revenue 32% higher at $61.76m. Normalized pre-tax profit, before expenses in respect of share options, was up 35% to $6.56m.

Revenues achieved in the Central American-Latin America, and Europe, Middle East and Africa regions and India, which comprise 84% of the group's total revenues, were up 44% on a year earlier.

Israeli revenues fell slightly due to the company's focus on higher margin opportunities.

The group expects growth trends experienced in the first half to continue, with its current order book, frame agreements and pipeline of opportunities for 2007 giving it good visibility.

Leadcom also said it is in discussions with its vendor partners regarding the expansion of already existing cooperation in India.

In addition, it is in the process of a capabilities demonstration trial and is confident that a successful completion of the trial phase will be followed by a "sizeable" amount of business performed in India during 2007.

"Management is comfortable with current market expectations and expects to record 2006 as the fourth consecutive year of a 40% level of year-on-year growth, improving profitability margins in areas of current operations, and penetrating new territories and countries," said the group.

As ever, anything from India is upside :)

http://www.leadcom-is.com/admin/literatureSubCat/Filesdownload/CS_H1_2006_August_06.pdf

From HB's Broker Round Up:

Altium Securities ....., has a buy rating and 105p target for Leadcom (LEAD.L)

Yes silvermede :

Altium reiterate BUY and 105p target today :


22-Aug-06
Leadcom Integrated Solutions LEAD

Altium Capital Buy 53.00p

Target - 105.00p - Reiteration

21st August Note :

http://www.leadcom-is.com/admin/literatureSubCat/Filesdownload/Altium_Post_H1_2006.pdf

25th August 06

http://www.business-standard.com/compindustry/storypage.php?leftnm=1&subLeft=1&chklogin=N&autono=102695&tab=r

Airtel signs $1 billion deal with Ericsson

Our Economy Bureau / New Delhi August 25, 2006

Bharti Airtel today announced that it has entered into a three-year service contract with Ericsson for an estimated $ 1 billion for design, planning, supply and installation commissioning of its networks in 15 circles.

The contract will enable Bharti Airtel to expand its mobile services footprint and reach out to all towns and cities in 15 telecom circles.

The contract also includes supply of next generation equipment like Media Gateway and MSC Server that will enable Bharti Airtel for an all-IP network, a company release said.

The deal will also enable Bharti Airtel to reduce the operational costs and introduce new services in a cost-efficient way, it added.

The two companies had entered into the countrys first manage service contract in 2004 for $ 400 million to manage services like network, base station centres and switching centres, which was extended in 2005 for $250 million, a company spokesperson said.

The 15 circles are: Delhi, Haryana, Punjab, Himachal Pradesh, UP (West), Andhra Pradesh, Tamil Nadu, Chennai, Karnataka, Kerala, Rajasthan, UP (East), Jammu and Kashmir, Assam and North East.

Manoj Kohli, president, Bharti Airtel said, Our partnership with Ericsson will allow us to focus on delivering better customer experience even as we leverage the world class expertise of our partners to roll out our networks across all census towns by March 2007. In addition, we are also sourcing next generation products that will allow us to deliver innovative products and services to our customers.

This partnership will enable Airtel to channel its resources and expertise to its core areas of product innovation, value added services, marketing, branding and pricing, while simultaneously providing world class mobile services by leveraging Ericssons world class expertise in network management.

Papalpower,

Is that 1billion US$? And, from having included this comment, are we to assume Leadcom have, or are about to have a slice of this pie? If so do we have an estimate of how much?

Lostandfound, yes it is a billion US dollars, and Leadcom could be in line for some of it. Whilst I would guess in the region of tens of millions of potential revenue for LEAD from this, it might be more in the long term. The bigger multi-billion BSNL deal is due for award in the coming weeks, its expected Nokia/Siemens will get the major slice of that one.

India is a massive growth market, and Leadcom are right in there........just a case of waiting.

A good post by MG at AFN :



Masurenguy - 26 Aug'06 - 09:56 - 1907 of 1908

PP - Given Leadcoms historical relationship with Ericsson, they could potentially fulfill a meaningful subcontracter role on the Airtel deal. If this proves to be the case then this could be the first important piece of Indian business to be gained.

Since the main Airtel contract has now been publicly awarded, I wonder whether the 'Capabilities Trial' (that Leadcom referred to at the Interims) relates to the Airtel deal, particularly since it was hinted that some announcement may be made in September prior to the completion of this trial ! I just wonder who they have to demonstrate their 'capabilities' too. One has to assume that it must be to the main client since Ericsson already have plenty of prior knowledge and experience of Leadcoms capabilities.

The biggest deal in the pipeline is still the BSNL contract which could be worth anything from $2.5bn to $4bn. It looks as though the Nokia/Siemens JV could be front runners for a major slice of that. I would have thought that there must be some public announcements relating to this during September or October.

"The companys current principal focus is India, where up to ten mobile operators are rolling out networks and signing up subscribers at the rate of 5m - 6m per month. We estimate that this is likely to create a demand for up to 100,000 towers over the next two years. At up to $60K per site this equates to $6bn in roll out revenue. Even if Leadcom can capture a small share of this it represents a significant opportunity"
Altium Note 21/08/06

"Liberalisation of the Telecoms market in India is leading to some 5m new mobile subscribers per month, and there is every prospect, once a platform has been established, for annualised sales to move beyond $50m in coming years. Whilst gross margins on Leadcom business are around 28% we would expect lower margins in India given the substantially higher volume of potential work"
Corporate Synergy Note 30/06/06

If Leadcom can climb aboard the BSNL deal, as a prime subcontractor, then it could represent a significant leap forward both in terms of the size of the company and in the scope and credibility of its business. Don't forget the reference, in the recent webcast, to the initial discussions with a significant US partner relating to a major roll out program that is scheduled next year. That could represent a further important slice of new business for 2007.

Any positive developments in India can only serve to enhance Leadcoms reputation as a credible international service player in the Telecoms market, which can only help them to achieve further new business from major roll outs in other markets.

http://in.tech.yahoo.com/060824/137/66x9h.html

Ericsson bags $1 bln order from Bharti By Reuters
Thursday August 24, 08:05 PM
By Niklas Pollard and Shailendra Bhatnagar

STOCKHOLM/NEW DELHI (Reuters) - Telecom equipment maker Ericsson won a contract worth an estimated $1 billion to expand and upgrade Bharti Airtel's telecoms network, the two companies said on Thursday.

The deal powered shares in Bharti, India's most valuable telecoms firm with a market value of $16.5 billion, to close 2.4 percent higher at 415.3 rupees in a firm Mumbai market.

Ericsson shares rose 1.76 percent to 23.10 Swedish crowns in Stockholm.

India, the world's fastest growing wireless services market that is adding nearly 5 million new users a month, has become a hotspot for global telecoms equipment giants like Motorola Inc. and Nokia.

Indian carriers such as Bharti, CDMA-operator Reliance Communications Ltd. and state-run Bharat Sanchar Nigam Ltd. have annual expansion plans exceeding $1 billion each.

"The three-year services agreement will see Ericsson manage design, development and deployment of Bharti's network, including capacity and coverage, enabling the operator to expand in rural India and reach out to all towns and cities in 15 regions," Ericsson said in a statement.

Bharti, amongst the pioneers of mobile services in India, will raise resources internally to fund the order, company officials said.

"This contract will take care of all our roll-out needs in these 15 circles for the next three years," Manoj Kohli, president for mobility at Bharti, told Reuters.

Ericsson has an existing relationship with New Delhi-based Bharti, which had more than 24 million GSM mobile users at the end of July. That number is growing by more than 1.2 million a month in a 108 million strong market, which substantially exceeds the combined population of Germany and Sweden.

LONG STANDING RELATIONSHIP

In February 2004, Bharti and Ericsson had signed a three-year contract worth more than $400 million, and followed up with a $250 million deal in June 2005.

Ericsson was optimistic of grabbing more orders from Bharti, which is 30.84 percent owned by Singapore Telecommunications Ltd. and nearly 10 percent by Vodafone Group Plc.

"It is clear that this deal shows that our products are good and it is promising when the biggest operator in India chooses us for such a big roll out." Mats Granryd, Ericsson's head of operations in India, said.

"This is one of the biggest deals which have been done in India. The contract is for three years, but I am convinced that we will continue to deliver to Bharti even after that."

[b]Ericsson is also one of the 5 bidders shortlisted for a GSM tender worth $4.8 billion floated by BSNL, the top Indian telecoms firm by sales.[/b]

Ericsson said it would also upgrade Bharti's network with its mobile softswitch system, which will allow the carrier to move toward a low-cost Internet Protocol platform.

The Stockholm-based telecommunications equipment provider already manages more than 70 percent of Bharti Airtel's GSM/GPRS network in 15 of the 23 regions making up India's telecommunications sector.

The top three players - Bharti, Reliance Communications and BSNL - are furiously expanding networks in communication-starved rural areas where more than two-thirds of India's billion-plus people live.

There is room for sustained boom as penetration rates of mobile services are just 11 percent in India - amongst the lowest in fast-growing economies. The cheapest call rates anywhere, of less than 2-3 U.S. cents a minute, also help.

Bharti has a presence in more than 4,200 towns and thousands of villages. The firm plans to extend networks to all census 5,200 towns by March 2007.